By Reuters | Updated: May 17, 2024
May 16 (Reuters) – Reddit (RDDT.N) has partnered with OpenAI to bring its content to popular chatbot ChatGPT, the companies said on Thursday, sending the social media platform’s shares up 12% in extended trade.
The deal underscores Reddit’s attempt to diversify beyond its advertising business, and follows its recent partnership with Alphabet (GOOGL.O) to make its content available for training Google’s AI models.
ChatGPT and other OpenAI products will use Reddit’s application programming interface, the means by which Reddit distributes its content, following the new partnership.
OpenAI will also become a Reddit advertising partner, the company said.
Ahead of Reddit’s March IPO, Reuters reported that Reddit struck its deal with Alphabet, worth about $60 million per year.
Investors view selling its data to train AI models as a key source of revenue beyond Reddit’s advertising business.
The social media company earlier this month reported strong revenue growth and improving profitability in the first earnings since its market debut, indicating that its Google deal and its push to grow its ads business were paying off.
Reddit’s shares rose 10.5% to $62.31 after the bell. As of Wednesday’s close, the stock is up nearly 12% since its market debut in March.
@ Thomson Reuters 2024
